Chevron allots $20 million for 5% bioethanol blend compliance

Chevron Philippines Inc. has committed to invest some $20 million to comply with the five-percent bioethanol blend mandated by the Biofuels Law.

Mark Quebral, Chevron manager for policy government and public affairs, told a press conference yesterday that they have started importing their ethanol requirement from Brazil to meet the Biofuels Law mandate which will be effective next month.

Quebral said that aside from Basic Energy, the company is also talking with a local ethanol producer based in Northern Luzon for a possible supply agreement.

Basic Energy earlier disclosed the possibility of supplying 25-to-50 million liters of ethanol to Chevron annually. The two firms have signed a memorandum of understanding to undertake a joint study to determine the feasibility of entering into an offtake agreement for the supply of bioethanol.

 Quebral said, they would start blending ethanol at their five biggest terminals which account for the company’s 70-80 percent volume. These terminals are located in La Union, Batangas, Pandacan, Cebu and Davao.

By Feb. 9 this year, he said Chevron will be able to offer bioethanol blended gasoline in all of its stations nationwide. 

While the investment figure for ethanol blending has been firmed up, Quebral said they are still studying if there is a need for the firm to expand its retail network.

 “Expansion is still being studied due to the foreseen impact of the global financial crisis. We will be able to determine if we need to expand once we have completed our review of our operations,” he said.

He said amid this crisis, the US-based oil firm does not see a need to cut down on their workforce.

“We are somewhat affected by the global recession, but we do not at that point of downsizing it (workforce),” he said.

Meanwhile, Seaoil Philippines Inc. yesterday cut the price of its diesel and kerosene by P1 per liter.

Other oil companies have reduced their prices by the same level the other day.

As this developed, Bagong Alyansang Makabayan is calling for the junking of the deregulation law in the light of rising LPG prices amid an alleged shortage in supply.

Bayan argued that consumers must not be made to bear the burden of rising prices, especially if there is reason to believe that the alleged supply shortage was avoidable to begin with.

The militant group said the de facto “price cap” being imposed by the Department of Energy on an 11-kg LPG tank is meaningless because LPG prices have long been deregulated. Big oil firms retailing LPG can merely invoke market forces and supply and demand as basis for price increases.

Even the price monitoring of the DOE posted at its website will show that several LPG brands are in fact being retailed by more than P500. As of Jan. 21, the Caltex LPG retails by as high as P520 in Metro Manila; Catgas, P525; and Philgas, P520, according to the DOE website. Despite these price monitors, there have been no sanctions on the LPG retailers.

Bayan believes that deregulation has not been able to bring down prices and has in fact strengthened the cartelized nature of the LPG market.

According to Bayan, despite the entry of the so-called “new players” under the deregulation regime, almost 92 percent of the domestic LPG market is still monopolized by only four companies: Petron accounts for 37.8 percent of the local LPG market, followed by Liquigaz (24.6 percent), Shell (20.5 percent), and Total (8.7 percent).